Zambia is a politically stable country. The World Bank assesses Zambia's regulatory quality and rule of law to be good. Corruption is declining and has no significant impact on business activities. Consequently, the likelihood of political unrest and expropriation is considered negligible.
Coffee price volatility on the global markets has been high in the past. The resulting price fluctuations led to the coffee crisis in 2001, with the lowest coffee prices ever recorded. Since the coffee crisis, a steady upward trend in prices is observed.
However, fluctuating coffee prices are still to be expected in the future. Production costs in Zambia are below the production costs in Brazil – which is the largest producer of coffee beans globally.
The production of specialty coffee decreases the risks of negative price fluctuations on global coffee exchanges. Specialty coffee cannot be considered a homogenous commodity and prices differ greatly between different countries, qualities and production methods. Zambian specialty coffee faces a great demand, which has exceeded supply in recent years. The demand for specialty coffee is growing strongly in Europe as well. These observed trends ensure reliable sales opportunities.
In Zambia, extreme weather events such as floods, droughts and heavy rain have already been observed and might increase in intensity and frequency. These major events have a strong impact in the southern and western parts of the country. The northern region is nestled between mountains and hills and the risk of flooding is therefore low. The most likely risk is an increase in precipitation-weak years.
These changes do not impact the Mt. Sunzu Coffee Estate negatively in the long-term. Climate change in our region should lead to an increase in precipitation.
Although the topographical features of the Mt. Sunzu Coffee Estate are well suited for enough rainfall, we cannot exclude the chance of a dry season in the future. We are mitigating the negative impact of too little rainfall on yields by using an irrigation system and by planting the coffee under shade trees.